Westinghouse wins Ukraine fuel supply deal

31 March 2008

An earlier version of this story included an incorrect figure for Ukraine's share of nuclear electricity and incorrect information on the designs of South Ukraine reactors. These errors are corrected below.

US-based Westinghouse will supply nuclear fuel to three Russian-designed power reactors in Ukraine. The contract has inspired bitter comment from Russian observers.

South Ukraine

Westinghouse will supply a total of 630 nuclear fuel assemblies to the three VVER-1000 pressurized water reactors at the South Ukraine nuclear power plant. Until now virtually all nuclear fuel has been supplied by Russia's TVEL. Nuclear power provided 48% of Ukraine's electricity in 2007.

In 2000, a financial award was granted by the US government as part of a US/Ukrainian initiative to reduce Ukraine's dependency on Russia for fuel. As well as nuclear fuel, the country also imports Russian oil, while gas supply and pricing has been a very major issue in recent years. The initiative led to six Westinghouse fuel assemblies being introduced to a South Ukraine reactor on an experimental basis in 2005; In 2009, 42 more will be added.

The new contract includes special terms to protect both the supplier and the buyer, national electricity utility Energoatom. Should Energoatom fail to gain regulatory approval for the use of Westinghouse fuel assemblies on a large scale, the American firm could terminate the contract with no penalty. On the other hand, if Westinghouse failed to meet technical standards, Energoatom could cancel.

In reaction to the announcement, Russia's Rosatom released a series of expert comments which roundly denounced the move. The various dignitaries agreed the contract was technically dubious and could be a negotiation tool during talks between Energoatom and TVEL for the remainder of nuclear fuel supplies. Furthermore they linked it to Ukraine's relationship with the European Union and its desire to join the Nato defence pact.

Chechenov Hussein, a member of the Russian Federation Commission on Natural Monopolies' subcommittee on atomic energy, said such contracts 'will bring Ukraine more harm than good.' He continued: 'I think this is a political decision not backed by economic and scientific considerations. The operation of a nuclear power plant involves the use of sophisticated, interconnected technology which can not introduce anything foreign.'